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Trump to Federal Employees: No Pay Raises for You!

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President Donald Trump announced Thursday that he’s cancelling an automatic 2.1 percent pay increase due to take effect for most civilian federal employees in 2019, calling them “inappropriate” given budgetary pressures.

“We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases,” Trump said in a letter informing House Speaker Paul Ryan (R-WI) of the pay freeze.

Trump also canceled “locality” pay increases — adjustments based on where an employee lives and separate from the across-the-board increase scheduled for 2019— that he said would average 25.7 percent and cost $25 billion.

The president’s letter said he has the authority to submit changes to federal employee pay in case of “national emergency or serious economic conditions affecting the general welfare” — a description that, as some noted, conflicts with Trump’s own assessment that the economy “has never been better.”

The changes reportedly would affect roughly 1.8 million government employees, most of whom live in areas outside of Washington, D.C. Military service members are still set to receive a 2.6 percent pay hike next year, the largest in a decade.

Under President Barack Obama, federal pay was frozen between 2011 and 2013 as the economy recovered from the Great Recession, and no president has allowed full locality pay increases to take effect, according to Bloomberg.

The reaction: Trump’s claims to fiscal responsibility raised more than a few eyebrows, and critics on the left said that this is just the kind of action they warned about after Trump’s deficit-financed tax cuts. Some of the responses:

“The president estimates that the 2019 federal employee pay raise he's scrapping would've cost $25 billion. For context, his tax law is projected by CBO to cost the Treasury an average of $190 billion each year for the next decade,” Bloomberg’s Sahil Kapur tweeted.

“How about we start with scaling back and paying for the tax cuts and spending bill, which together will add $400 billion to next year’s deficit, alone,” wrote Marc Goldwein of the Committee for a Responsible Federal Budget. Goldwein and Matthew Yglesias also noted that the pay freeze wouldn’t save any money unless lawmakers reduce spending caps accordingly.

“Republicans gave corporations a trillion dollar tax cut and are now cutting pay raises for social workers, janitors, painters, clerical workers, and more. It’s outrageous,” said Sen. Kamala Harris (D-CA).

Why it might not matter: Congress could still override Trump’s decision. The Senate has already voted for a 1.9 percent pay raise for civilian federal employees in 2019, but the House version of the spending bill does not include that increase. Those two bills must now be reconciled. “The final decision will be made as part of the congressional budget process — if House members and senators agree on a pay hike before the end of the year, Trump’s letter will be moot and a raise will take place anyway,” The Washington Post’s Eric Yoder reports.

Why it does matter: This becomes the latest in a string of battles between Trump and federal employees. "Federal employees have had their pay and benefits cut by over $200 billion since 2011, and they are earning nearly 5 percent less today than they did at the start of the decade," said J. David Cox Sr., national president of the American Federation of Government Employees, the largest union representing federal workers.

The president says that federal employee pay should be based on performance and should not involve fixed pay increases. “Across-the-board pay increases and locality pay increases, in particular, have long-term fixed costs, yet fail to address existing pay disparities or target mission critical recruitment and retention goals,” Trump said in his letter to Congress Thursday.

Federal employee unions have pushed back on efforts by the administration to restrict bargaining and make it easier to fire federal workers, and a federal judge on Saturday invalidated Trump executive orders on those issues.

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.